Teacher Pensions Blog

Today is Veterans’ Day, and as we honor those who served our country, we should consider the benefits that we provide veterans and their families. 

We have had a number of military families write to us about their need for portable retirement benefits. While teacher pension plans may work for workers who stay in a single state for an entire working career, they severely punish mobile workers. Because military families frequently move, military spouses who work as teachers won’t meet their state’s minimum service (or vesting) requirements to qualify for a minimum retirement benefit. Instead, their teaching service years are spread across several different states and they may end up not vesting at all, or having a number of partial pensions that are far less generous than if they had stayed in one state. State pension aren’t transferrable, at least not for free, and a teacher who splits a career across multiple states will end up with significantly less in lifetime benefits.  

Yesterday, Congress approved a historic overhaul of the military pension system. Under the new bill, new military personnel will have access to 401k-type benefits. A sharp improvement to the old system, the new portable plan would allow many more members to qualify for benefits earlier on and take their benefits wherever they go. Under the current defense pension plan, enlisted personnel need to serve a minimum of 20 years before qualifying for any benefits at all.

In terms of retirement reform, Congress is moving in the right direction. States should follow suit. If more states offered teachers portable benefits, more military spouses would be able to earn adequate retirement benefits for their service in the classroom.